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Author Question: If an individual is a debtor (Read 40 times)

kaid0807

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on: Apr 19, 2019

Question 1

Assume that Brenda has positive wealth. As the interest rate decreased, Brenda reduced her current consumption. For Brenda


◦ the substitution effect of an interest rate decrease outweighs the income effect.
◦ the income effect of an interest rate decrease outweighs the substitution effect.
◦ the substitution effect of an interest rate increase must be zero.
◦ the income effect of an interest rate decrease must equal the substitution effect.

Question 2

If an individual is a debtor


◦ the substitution effect of an interest rate increase is zero.
◦ the income effect of an interest rate increase is zero.
◦ the income and substitution effects of an increase in the interest rate work in the same direction.
◦ the income and substitution effects of an increase in the interest rate work in opposite directions.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by kaid0807 on Apr 19, 2019

lindahyatt42

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Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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kaid0807

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Reply 2 on: Apr 19, 2019
YES! Correct, THANKS for helping me on my review

irishcancer18

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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